Rockwell Automation Misses Q4 Expectations, Shares Drop

Shares of

dropped over 5 percent in pre-market trading after the company reported weaker-than-expected results for its fiscal fourth quarter and issued a weak forecast. The Milwaukee, Wisconsin-based company reported a quarterly profit of $201.3 million, or $1.50 per share, versus a year-ago profit of $248.7 million, or $1.79 per share. Excluding certain items, the company's earnings slipped to $1.57 per share from $1.86 per share. Its revenue fell 9.8 percent to $1.61 billion. However, analysts were expecting a profit of $1.79 per share on revenue of $1.68 billion. The average estimate among 17 Estimize users was for earnings of $1.79 per share and revenue of $1.69 billion. Sales at the company's Control Products & Solutions unit fell 10.7 percent to $923.6 million in the quarter, while Architecture & Software segment sales slipped 8.5 percent to $683.9 million. Total segment operating margin shrank to 20.9 percent from 22.2 percent. During the fourth quarter, Rockwell Automation repurchased 1.8 million shares of its common stock at a cost of $196.5 million. Keith D. Nosbusch, chairman and chief executive officer, said, "Both sales and earnings were below our expectations in the quarter. Sales softened through the quarter and September was especially weak, particularly in the U.S." Rockwell Automation expects FY16 adjusted earnings of $5.90 to $6.40 per share, and sales of $6 billion. Analysts projected earnings of $6.61 per share on revenue of $6.4 billion. Nosbusch added, "We are experiencing weak market conditions as we enter fiscal 2016. Heavy industry end markets including oil and gas have not yet stabilized, and we see continued softness in key emerging markets. In our largest market, the U.S., the strong dollar is adversely affecting producers and OEMs. As a result, our customers are being more cautious with capital expenditures and operating spending. We therefore expect a particularly weak start to the fiscal year and don't believe we will see year-over-year growth until later in fiscal 2016." Rockwell Automation shares fell 5.77 percent to $101.57 in pre-market trading.